Please undertake the analysis from BOTH a parent and project view point.

please show all work and elaborate. Thanks!

4. Natural Mosaic. Natural Mosaic Company (U.S.) is DO considering investing Rs50,000,000 in India to create a wholly owned tile manufacturing plant to export to od me the European market. After five years, the subsidiary would be sold to Indian investors for Rs100,000,000. A pro forma income statement for the Indian opera- Ooh tion predicts the generation of Rs7,000,000 of annual cash flow, is listed in the following table. go on 30,000,000 dom ebr Less cash operating expenses (17,000,000 I Gross income 13,000,000 Less depreciation expenses (1,000,000) Earnings before interest and taxes 12,000,000 le Sales revenue Less Indian taxes at 50% (6,000,000) Net income 6,000,000 Add back depreciation awoll do 1,000,000 Annual cash flow zwoluto 7,000,000 ibideo oer The initial investment will be made on December 31, 2011, and cash flows will occur on December 31st of each succeeding year. Annual cash dividends to Philadelphia Composite from India will equal 75% of accounting income. The U.S. corporate tax rate is 40% and the Indian corporate tax rate is 50%. Because the Indian tax rate 000,0 is greater than the U.S. tax rate, annual dividends paid to Natural Mosaic will not be subject to additional taxes in the United States. There are no capital gains taxes on the final sale. Natural Mosaic uses a weighted average cost of capital of 14% on domestic invest- ments, but will add six percentage points for the Indian investment because of perceived greater risk. Natural 000,00 Mosaic forecasts the rupee/dollar exchange rate for December 31st on the next six years are listed below. DS 2011 2014 R$/$ R$/$ 50 62 2012 lon 54 2015 2014 SEPT. 2002 bild 401 do srl 66 2013 58 2016 70 stoi ohon Tri What is the net present value and internal rate of return on this investment? -120 4. Natural Mosaic. Natural Mosaic Company (U.S.) is DO considering investing Rs50,000,000 in India to create a wholly owned tile manufacturing plant to export to od me the European market. After five years, the subsidiary would be sold to Indian investors for Rs100,000,000. A pro forma income statement for the Indian opera- Ooh tion predicts the generation of Rs7,000,000 of annual cash flow, is listed in the following table. go on 30,000,000 dom ebr Less cash operating expenses (17,000,000 I Gross income 13,000,000 Less depreciation expenses (1,000,000) Earnings before interest and taxes 12,000,000 le Sales revenue Less Indian taxes at 50% (6,000,000) Net income 6,000,000 Add back depreciation awoll do 1,000,000 Annual cash flow zwoluto 7,000,000 ibideo oer The initial investment will be made on December 31, 2011, and cash flows will occur on December 31st of each succeeding year. Annual cash dividends to Philadelphia Composite from India will equal 75% of accounting income. The U.S. corporate tax rate is 40% and the Indian corporate tax rate is 50%. Because the Indian tax rate 000,0 is greater than the U.S. tax rate, annual dividends paid to Natural Mosaic will not be subject to additional taxes in the United States. There are no capital gains taxes on the final sale. Natural Mosaic uses a weighted average cost of capital of 14% on domestic invest- ments, but will add six percentage points for the Indian investment because of perceived greater risk. Natural 000,00 Mosaic forecasts the rupee/dollar exchange rate for December 31st on the next six years are listed below. DS 2011 2014 R$/$ R$/$ 50 62 2012 lon 54 2015 2014 SEPT. 2002 bild 401 do srl 66 2013 58 2016 70 stoi ohon Tri What is the net present value and internal rate of return on this investment? -120